The economic impact of the Mediterranean Sulfur Emission Control Area

Pierre Cariou, Alice Thébault Guët, Jason Monios and Ronald Halim
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Pierre Cariou: Kedge BS - Kedge Business School
Alice Thébault Guët: KEDGE Business School [Marseille]
Jason Monios: Kedge BS - Kedge Business School
Ronald Halim: UCD - University College Dublin [Dublin], Conway Institute of Biomolecular and Biomedical Research - UCD - University College Dublin [Dublin]

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Abstract: The sulfur content of marine fuel is limited by regulation when ships sail inside designated Sulfur Emission Control Areas (SECAs). This policy has clear environmental and health benefits, but it also increases the cost of maritime transport and can potentially affect trade. We develop a specific modelling framework to measure the impact of the future Mediterranean SECA in 2025, considering its effects at the trade level and country level. Our framework leads to the estimation of 30 augmented gravity models for 445,506 bilateral maritime flows and for 15 different products. Our estimates show a potential reduction in the value of trade estimated at −1.0 % with a reduction of −1.1 % for imports and −0.8 % for exports. The sectors the most affected in percentage terms are foodstuffs, animal products and vegetable products. Our estimations also show that the countries that will be the most affected could be Syria (-1.5 %), Lebanon (-1.4 %) and Spain (-1.0 %).

Keywords: Sulfur emissions; Maritime; Gravity model; Environment (search for similar items in EconPapers)
Date: 2024-10
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Published in Marine Policy, 2024, 168, pp.106300. ⟨10.1016/j.marpol.2024.106300⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05495294

DOI: 10.1016/j.marpol.2024.106300

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